Yukos back taxes to pay for budget sector workers' wages

Some local back taxes (35 billion rubles, $1 equals about 29 rubles) that Yukos has paid to the budget of the Khanty-Mansi autonomous area will be channeled to help other Russia's constituent entities whose budgets are least balanced, runs the press release of the Russian Finance Ministry, circulated on Monday.

The fair use of taxes that Yukos has paid as part of measures to strengthen the tax discipline was under discussion at the conference of the Khanty-Mansi leadership and the Russian Finance Ministry. Finance Minister Alexei Kudrin and local Governor Alexander Filipenko signed a protocol to the effect.

The press release of the Russian Finance Ministry cites a quotation from the document summing up the conference: "As a result of the Russian government's measures to consolidate tax discipline, additional revenues from the Yukos tax payments to the Khanty-Mansi budget may soon total 52.3 billion rubles."

The press service of the Russian Finance Ministry stressed that 35 billion rubles forwarded to form a relevant fund in the 2005 federal budget will be fully channeled to the 40 constituent entities whose budgets are least balanced. In the first place, this money should be spent on full and timely payment of wages to budget sector workers in these regions, on winter preparations, and on the operation and reconstruction of the housing and communal sector.

According to the press release, the federal center and the Khanty-Mansi autonomous area's leadership have suggested that free transfer of the 35 billion rubles to the federal budget be discussed in the local Duma. The transfer is aimed to form a reserve in the 2005 federal budget, providing for balanced budgets of the Russian federation members in view of the work to delimitate authority at different levels of power.

The Khanty-Mansi budget is expected to receive 17.3 billion rubles. Seven billion of this money will be sent to the federal budget as a budget loan from the Khanty-Mansi budget for two years. "These decisions to increase budget aid to the regions with scarce funds seek to balance social security of all Russian citizens, regardless of where they live and work," the press release specifies.

In 2003, the local budget received 82.4 billion rubles in revenues, and 52.4 billion rubles in the first six months of this year. Proceeding from the 2003 dynamics, the 2004 revenues are expected to account for 116.3 billion rubles. In the first six months of 2004, revenues' growth rate totaled 129%, as compared to 126% across Russia.

According to the press release, given the local budget receives the additional 10.3 billion rubles, the local revenues will account for 126.3 billion rubles in 2004.